Manufacturing readings sap Asia equities mood - Financial Times

Hong Kong’s Hang Seng index fell 0.5 per cent, while Tokyo’s Nikkei 225 lost 0.2 per cent after hitting a 15-year high on Monday. The Shanghai Composite edged down 0.1 per cent from a seven-year high.

The mood was subdued after purchasing managers’ indices on China and Japan dropped to multi-month lows for March.

HSBC’s “flash” China manufacturing index fell to 49.2, an 11-month low and down from 50.7 last month. A reading below 50 indicates contraction.

“Today’s PMI reading is the latest in a string of disappointing data out of China and strengthens our view that the economy likely slowed sharply in the first quarter,” said Capital Economics.

Markit’s preliminary survey on Japan hit a 10-month low, though it remained in growth territory at 50.4. Details of the report indicated that new orders — a forward-looking component that feeds into production — were falling this month.

The data showed that Japan’s economy is still limping out of a recession last year induced by a 3 percentage point rise in the country’s sales tax to 8 per cent.

Wall Street’s performance offered mixed signals for Asia. The US dollar continued to weaken and Brent crude oil prices jumped 1.1 per cent to $55.92 a barrel — both bullish signs — but the S&P 500 fell 0.2 per cent.

Australia’s S&P/ASX 200 was again climbing toward the 6,000 mark, last seen in January 2008. The index rose 0.1 per cent to 5,963, led by the materials and energy sectors. Gold miners advanced 2.8 per cent after the precious metal’s price rose 0.6 per cent overnight to $1,189.82 an ounce.

Shares in Qantas fell 2 per cent after the country’s consumer watchdog said it may block a proposed tie-up with China Eastern on the grounds that it would be a “significant” detriment to consumers, as the two airlines account for more than four-fifths of all seats flown between Sydney and Shanghai.

Some Asian currencies picked up against the bruised dollar. The Malaysian ringgit strengthened 0.7 per cent, continuing to rebound from a six-year low hit last week. South Korea’s won was up 0.6 per cent, a second strong gain after nearing a two-year trough last week.

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